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The machine to machine revolution comes of age

Overview

Mobility is turning out to be the ultimate “disruptive” technology. Starting out as simply a way to make phone calls when out of the house or office, the mobility infrastructure has expanded and diffused to the point where almost everything is connected to the network, or about to be connected.

While people may need only a single mobile handset, they will soon find themselves interacting with hundreds—if not thousands—of M2M devices as they go about their lives. The M2M revolution is already here, considering the numerous networked devices now fixtures in everyday life—such as security cameras, traffic sensors, navigation systems, home appliances, payment systems, healthcare devices, ticketing systems, and vending machines.

Analysis

For MNOs, the first step in evaluating M2M opportunities is gaining insight on how the technology is changing business for their enterprise clients.

While many of these changes are specific to particular vertical markets, this paper broadly highlights five M2M-related trends that are relevant to almost all industries and enterprises.

Trends

Trend 1: Enterprises are transforming products into services by maintaining communications with their products after they are purchased by consumers.

Trend 2: Enterprises are exposing their IT assets to developers, both internal and external, who are crafting applications and devices that orchestrate numerous information resources.

Trend 3: Enterprises are supplementing their own digital assets with shared platforms that provide a common foundation for vertical market applications and devices.

Trend 4: Enterprises are creating “smart environments” that consist of fixed-location devices that interact with consumer smartphones and other mobile devices.

Trend 5: Enterprises are extending their payment systems and rewards programs throughout the digital ecosystem, including M2M devices.

Recommendations

The burgeoning M2M marketplace is both a windfall and a challenge for MNOs. It is a windfall because MNOs, by dint of their owning the networks, are at the center of action and are surrounded by a host of new potential revenue opportunities. It is a challenge because the M2M business is so dissimilar from the handset business, which MNOs built from the ground up and still dominates both their technical and business thinking. MNOs must be prepared to rethink a number of industry touchstones. For example, common performance metrics such as ARPU have a very different significance to the M2M business than to the handset business.

In summary, the high performance MNO will offer a suite of M2M services that go beyond reliable transport. They will make it easy for enterprises to do business by offering turnkey solutions, robust development tools, and flexible business models. Finally, they will position themselves for long-term participation in emerging value chains by having a clear and defensible strategy at both the device level and service level where device data is collected, analyzed, and acted upon.

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